Basics of digital onboarding – Part 1: What is customer onboarding and why does it matter to my business?

Digital customer onboarding in the early stages can define the relationship your customer has with you on an ongoing basis. But what exactly is customer onboarding and why is it so critical?

You and your company may have captured a customer’s attention, your product solves a problem for them and they have signed up to your business. But then crucially, they run into a problem: if it takes too long or is too complicated to actually begin using your services, you may never see your potential long term customers again. The quality of your service, marketing or technology will not matter if your onboarding is bad.

As they say, you never get a second chance to make a first impression. This is why good customer onboarding is so important.

But what is customer onboarding?

Customer onboarding is the first step in the customer journey and arguably the most important. It is the process of having a new person become your customer and everything you do to identify that person.

A significant amount of customer churn (the loss of customers) takes place between a person signing up for the service and actually using it. This is why customer onboarding is such a critical business consideration.

If you don’t know how you are going to onboard your customers, you simply will not acquire customers. Onboarding encompasses everything a customer does when they first enter your website, from giving their information to being taken through the business. Successful onboarding is there to make sure the customer starts using your service faster with more knowledge of how to use it. It also lets you get to know the customer and create a personalized experience for them. It is the sum of all actions that need to be completed before someone can start to use your service.

With the information received during the onboarding process, the customer can receive personal offers, targeted products and an easier experience. For your business, you receive customer data, reduced customer churn and therefore increased revenue.

The Battle to Onboard 2020

What information needs to be collected?

Onboarding starts with you asking the user for information. Collecting important information is one of the most critical aspects to make an effective onboarding process. This is different for varying businesses of course. Some businesses need very little information. For example a flower shop will only need a name, shipping address and billing information. But, if you are a regulated business, like a bank or an insurance company, you are required by law to know the verified identity of your customers.

Some of the most basic pieces of information to be collected at the onboarding stage are:

  • Name
  • Email address or phone number

It may be necessary to collect more data later on such as location, age and payment information. But this information needs to be validated. For example, how do you know if your customer is really who they say they are? There are two phases of activity with onboarding:

        1. Where the user is obliged to contribute information
        2. Where the company uses that information to validate who the client is

Many businesses simply validate customers via the customer’s email address. This is routinely validated by the organization sending an email with a one-time code. The customer enters that code as proof that they have access to that email. This can also be done with a phone number and a text message that can be sent with a code. This is a typical starting point. But how much do you really know about the customer?

In the physical world, if a customer comes in, you can usually validate who they say they are by looking at their forms of ID, such as a passport or driver’s licence. Or in the case of an off-licence, if a customer wants to buy alcohol, the business can validate they are the legal age to buy it by checking their ID. But online, it is much more difficult to validate a customer’s identity.

New report: The Battle to Onboard

Find out why 63% of consumers abandoned digital banking applications in 2020 – more than ever before. Read our digital onboarding report for 2020 here.

 

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